NEARLY £30bn was wiped from the value of Britain's biggest companies yesterday as the FTSE 100 Index fell for an unprecedented eleventh day in a row.

Fears over a war with Iraq, terrorism and the health of the economy pushed the Footsie down 122.9 points to 3480.8 in a day of turmoil in the City.

One would have to look back to September 1995, to find a time when the index was last this low- at one point it was just more than half its all-time high of 6950 - at the height of the tech-boom - in December 1999.

Analysts warned the sell-off could continue, despite the heavy falls endured by big names such as Lloyds TSB, BP and Vodafone.

Tom Hougaard, trader at City Index, said the FTSE could fall another 300 points. He said: "There is no real impetus to buy equities in the UK or Europe right now.

"If we get some kind of resolution on Iraq the market could easily gain six to eight per cent in a day. Otherwise it looks as if we will continue on downwards."

The jittery feel to the City was reflected by gold prices rocketing above the £225.62 an ounce level for the first time in six years. Currency markets were also sent reeling, with the US dollar hitting fresh three-year lows against both sterling and the euro.

Speculation was growing that further falls could cause severe problems for life insurers, given the pressure the sell-off puts on their all-important solvency ratios.

The tumble endured by the FTSE over the past year has already forced numerous companies to set aside more cash for their dwindling pension pots.

Insurance companies dominated the FTSE 100 fallers board with only one blue-chip company making any progress - specialist services firm Rentokil Initial.

Of the heavyweights on the slide, Vodafone dropped by more than three per cent, Lloyds TSB fell by almost six per cent and BP tumbled by three per cent - nearly 200p below its price a year ago.

Shadow Chancellor Michael Howard MP said the Government's policies had "clearly damaged business and the stock markets in Britain".

He said: "Labour has imposed extra costs of £15bn a year in red tape and taxes on business. So it is not surprising that corporate profitability is at its lowest level for a decade."